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January 2019  

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What You Need to Know About Disaster Recovery
Be ready for disaster with these business recovery tips

The destruction of the 2018 hurricane season and the fires in California throw the challenges of recovering from a disaster into sharp relief. While many face challenges in the aftermath of a disaster, businesses tend to struggle a great deal: The Federal Emergency Management Agency reports that 40-60 percent of small businesses are forced to close following a disaster. By taking several key steps both before and after disaster strikes, it is entirely possible to pull a business back from the brink of ruin.

Before the disaster

One of the best ways to ensure a swift recovery following a disaster is preparation, particularly when it comes to rebuilding in the aftermath. For this, you will need a well-defined disaster-recovery plan, which is especially important if your business operates in a region where disasters are more common.  

Sharhira Raineri of The Balance Small Business recommends a six-step disaster-recovery plan. First, you should determine which jobs would be critical to getting your business back up off the ground. In a similar vein, you should create a list of all vital equipment and furniture for each job, limiting it solely to imperatives like computers, telephones, desks and chairs. Consider your essential support equipment as well, which can include servers and server software, business phones, data and cash.

With everything inventoried, you would then set out to find an alternative office space that you could occupy during a rebuild. Raineri recommends considering multiple alternatives and working with both real estate agents and with the owners and operators of neighboring businesses who may also want to make use of that space. You can also embrace possibility of allowing employees to telecommute or work remotely if your business model allows.

Look over your insurance policy and be sure that there are no gaps in coverage. At the same time, you should have a budget prepared for a worst-case scenario if you should have to begin purchasing or leasing equipment and supplies using your cash reserves. Make sure that your disaster-recovery plan is safely stored and accessible to those who need it. Raineri recommends keeping multiple copies, including at least one copy stored off-site.

Immediate aftermath

Following the disaster, you will need to assess the damage done. Business News Daily notes that you will want to consider not just the damage to your physical business, but to your team — check in with every member of your staff and ensure that they are safe and accounted for.  

Rohit Arora, co-founder of Biz2Credit, writes for Forbes that documenting the damage is essential. Take photos and video to go along with your insurance claim, and file it as quickly as possible since policies often require business owners to submit claims within a certain timeframe following a disaster.

In addition to coverage from the insurance company, it is possible that the federal government may also offer some level of assistance after a disaster. Check with the Small Business Administration, which has various disaster-recovery programs, and see if you qualify for any relief assistance.


Lisandra Pagan of Deliberate Plan Consulting writes for Business News Daily that there is no opportune time to rebuild after a disaster; rather, you should begin doing so as quickly as you can. She notes that every day you wait to put your recovery plan into action is the further away you move from reopening. If you are able, reopening your business even in a limited capacity shows your customers that you have no plans of folding following a disaster. If this is not the case, be sure to keep an open line of communication that lets your customers and clients know what your status is.

There is no guarantee that a business won’t experience multiple disasters over time, and there is no definite way to know what those disasters will be or when they will strike. The best that you can do is be ready to face a disaster head on before it happens, which better enables you to emerge on the other side.  

Published by American Heritage Bank
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Disclaimer - All content contained in this newsletter is for informational purposes only and should not be relied upon to make any financial, accounting, tax, legal or other related decisions. Each person must consider his or her objectives, risk tolerances and level of comfort when making financial decisions and should consult a competent professional advisor prior to making any such decisions. Any opinions expressed through the content in this newsletter are the opinions of the particular author only.

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